The US was supposed to lead the recovery but so far in 2012 it’s the only economy that’s doing better — more like an island of recovery. And growth in the USA doesn’t look strong enough to carry the rest of the globe.

Either way, USD longs are a compelling choice.

There is talk of a large Japanese bid in USD/JPY but rising yields after the claims data are also supportive. Offers at 83.25/30 and 83.45/50.